Over the years, I have observed many different procurement teams across a range of industries. Whilst most do a good job, only a handful do a GREAT job. The team at Insider have spent some time researching this and would like to share with you our take on what those top performing procurement teams have in common.
But first, let me tell you how you can spot a GREAT procurement team within a few seconds. Take at look at their office:
Are they all sat at their desks?
If the answer is Yes then it is highly likely that this is NOT the kind of forward thinking, dynamic, value adding, disruptive procurement team that you’ll find in the top performing companies in your industry.
The procurement consultancy team at Insider Procurement aren’t found at their desks. Instead, they are:
- Out there, with the end customer understanding what needs they have and what frustrations are being felt;
- Working with colleagues to understand what challenges are being faced and how procurement can help them to their jobs more effectively;
- Constantly reviewing the development plans for the business and ensuring that procurement is maintaining 80% of spend under management into the future, keeping pace with changing requirements;
- Working with suppliers to understand options in terms of design, production, delivery and service
- Immersing themselves within the company to play a pivotal role in helping the business leadership team to deliver on their goals.
- Communicating with and observing peers in their own, adjacent or entirely different industries and challenging how they can use this cross-industry insight to move their business forward.
- Staying on top of emerging trends in their market and their suppliers' markets and being prepared for the future.
In other words, the more progressive procurement teams take the time to understand what really drives value for their company and their customers. They don’t take at face value that something needs to be bought.
Instead, top performing procurement people understand what is at the core of their business and work with designers, engineers, manufacturers, suppliers and even customers to challenge what is being requested and find solutions that create real value for their business.
Added to that, top performers take the time to really understand their potential suppliers’ people and organisations, not just the products and services that they can deliver. They understand the importance of cultural fit and how that can impact important elements of supply like speed to market and, should the need arise, problem solving.
Whilst many think the value that procurement teams drive lies in better margins, when procurement is truly engaged in the business, they can impact other elements of the business as far ranging as employee satisfaction, customer satisfaction and product design to drive a more significant impact to the bottom line.
This is just one aspect of the principles of “disruptive procurement” - which is the process of creating real business value and competitive advantage by:
- deconstructing what the business really needs,
- challenging established business processes,
- leveraging knowledge from outside the normal points of reference, and
- designing, assembling and managing the supply chain in new and innovative ways.
- To learn more about the 7 key ingredients of disruptive procurement read our blog.
- To discover real world examples of disruptive procurement in action, from our own procurement consultancy experiences download our eBook.